I apologise for the delay in responding to your posting. Prior to 26 January 1949, there was no Australian nationality. Australian citizens were British subjects and anyone who became naturalised in Australia received British nationality. Therefore, Australian residents of British (or naturalised British) status were not required to seek naturalisation in order to become Australian citizens. As a consequence your father would not have needed to be naturalised.

After 26 January 1949, Australian legislation was amended so that after this date British migrants who wished to become Australian citizens had to apply for citizenship.

I think for the purposes of citizenship by descent you need to prove that he was a resident of Australia for a certain amount of time prior to his returning to the UK. I recommend you contact the Australian Department of Immigration and Citizenship seeking information about their requirements for proving citizenship by descent. http://www.citizenship.gov.au/applying/how_to_apply/descent/

The records that the National Archives of Australia holds that may be useful to you in proving his residency in Australia include passenger arrival and departure records, possibly child migration records, and defence service records if he served in the Australian forces during WWII. If you wish to follow up any of these leads, I recommend you use one of our online forms http://naa.gov.au/collection/using/askquestion/index.aspx to submit a reference inquiry, and one of our reference officers will search the collection on your behalf. Please provide as much information as you know, as it will help our staff to locate your father’s records.